Motor tax discs are here to stay, says Coveney

Simon Coveney, the local government minister, has ruled out abolishing motor tax discs despite pressure from the country’s largest local authority.

Dublin city council, which operates the motor tax service on behalf of the four local authorities within the capital, wants the government to follow the decision of the UK to do away with the requirement to display tax discs on car windscreens as proof of paying motor tax.

The council said that it would support the move as the current system involved a “body of work” that required significant resources. It issued around 200,000 motor tax discs through its public office in Smithfield last year and processed more than 1.1 million discs online.

The council told Mr Coveney that automatic number plate recognition technology had been used by gardaí since 2010 and could detect cars that were not properly taxed, thereby rendering display discs redundant. Such technology can read car number plates at a rate of six per second on vehicles travelling at up to 180km/h. About 100 garda vehicles located throughout all divisions are fitted with such equipment, the council said.

AA Ireland has also supported calls for the abolition of tax, NCT and insurance discs in cars as a measure of eliminating fraud through the sale and use of fake discs.

Mr Coveney informed the council last week that he had no immediate plans to change the existing system. He said that there had been an increase in the rate of untaxed vehicles in the UK since the abolition of discs in October 2014.

In 2013 the rate of untaxed vehicles in the UK was estimated at 0.6 per cent but the figure had risen to 1.4 per cent by 2015. The UK Department of Transport said that the higher number of unlicensed vehicles was costing around £80 million (€91.1 million) in lost revenue each year.

Mr Coveney also said that a recent report by an Oireachtas working group established to examine the cost of insurance had decided not to recommend the abolition of a paper-based insurance disc. The group also cited the UK experience as its reason for not endorsing the removal of the requirement to displays discs on the windscreens of vehicles.

“It is too early to be definitive on the longer-term impacts of the abolition of the disc in the UK. In terms of evasion and impacts on revenue, officials in my department will continue to monitor developments in this regard,” Mr Coveney said.

A report on the efficacy of the current motor tax system in Ireland is due to be published by the comptroller and auditor-general next month.

The government has resisted repeated calls from opposition TDs to end the higher costs faced by motorists who pay motor tax by three or six-month instalments rather than annually, as well as introducing a system of regular direct debit payments to pay the tax. Rates for the biannual and quarterly options are 55.5 per cent and 28.25 per cent of the annual charge respectively.

Income from motor tax has been falling in recent years due to the growing proportion of post-2008 vehicles on Irish roads and despite the introduction of laws to crack down on vehicles being falsely declared “off the road” to avoid paying tax. Revenue from the tax last year was just over €1 billion, which was down €72.7 million on 2015 figures and a decrease of 6.5 per cent.

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